The cash flow that your business gets is what’s keeping it afloat. In order to operate, your small company needs to thrive from it. Use these tips to improve your cash flow management and make the most of your business’ income.

What is cash flow? Anytime there is money that gets moved in and out of your company is considered cash flow. Tracking your weekly, monthly, quarterly, or yearly amounts is vital on understanding exactly where all of that money is going.

You want to have positive cash flow, which is when you’re getting more income than you are with spending. Having negative cash flow means that despite all of your sales, you’re dishing out more than you are taking in.

Having the same amount leaving and entering your business will keep it steady, but it won’t make you and your employee’s money. Cash flow takes time and it won’t happen overnight. Speed up that process by using the following tips:

  1. Increase your sales. When you’re looking for more income, go out and make it happen! Attract new customers, offer more goods, and extend your services to outside of your market. These extra steps will take time, but when you achieve it, you’ll start noticing an improvement.
  2. Tighten your payment requirements. If you’re noticing that some loyal customers aren’t always paying their bill on time, it might be time to make due dates. Have your customers pay by a certain date, or else you will charge them a late fee. If your business has the option of lowering their credit, make sure they’re aware of it. Offer payment plans if they are unable to pay on time, so you will know exactly how much you’ll be getting from them at different points of the year.
  3. Offer discounts to qualifying customers. If your clients pay their dues earlier than your requirement, reward them with a small discount. It can be small enough that you barely notice the money missing, but it will help you get the right amount of income when you need it.
  4. Make a goal. If you want to bring in X amount of dollars per month, then start working at it. Get in the flow of how your customers currently pay, then find a way to increase it. If that’s by going out and making sales, raising your prices, or lowering your office budget, find a reasonable way to make it work.

Managing your small business has many rewards. Let a solid cash flow be one of them. For more advice on how to run your small business, give us a call at 856.794.8400.